The Yuan was devalued by 1.9% against the US dollar and made less revenues when converted to US dollars. Selling the device at in china will bring less revenues compared to the same price tag in US and hence opening channels for the device in US market is a promising return venture. This means that the raw materials are cheap in China homeland and hence less costs in production. Selling at a high dollar value in US will generate more revenue. The labor in US is cheap and readily accessible to produce promising quantities of the device enough to be exported to overseas markets like US (Yigang 162).
The Foreign direct investment (FDI) in US encourages investments from foreign countries who bring in R&D and innovation in the smartphone industry. The MI 5 entry will be targeted to meet the demands of the middle-earning class who cannot afford to clinch on the Apple and Samsung expensive counter parts. China has a value-generating technological capability (Yigang 153) and the investment of selling the gadget to US market will benefit both countries. US has a nature political base and the risk of expropriation is not sensible as the asset seizures were reduced to zero by stronger international laws. Policy risk neither can’t happen as US Mobile has been selling Xiaomi devices before (Lancaster 310).
The Consumer trends in US relative to phone is of concern. Most citizens in US will prefer Apple and Samsung deices despite their high price tags and same features as the same features as the $415 MI 5 device from China. In terms of purchase criteria, US consumers buy smartphones from carriers who decide what is to be sold at a particular time. Smartphones and tablets from other foreign companies are subjected to an extensive quality assurance test (Blythe 202).
Market size of the US is filled with Samsung and Apple models and very few people purchase outside devices. Any other model coming in faces stiff competition from these two models. The frequencies in the US market are so diverse and the carrier requirements are so steep and makes it very hard to penetrate the market. The culture of purchasing in USA and China is different as customers in US buy their devices through wireless carries as I stated but in China smartphones are purchased from their website. China then has started selling theirs through direct sales and online sellers (Taylor 223).
The Chinese Company behind the release of the MI 5 phone have had previous desires of getting in the US market for a long time but have not yet concentrated on the steps they should take to be successful. The company’s flagship cannot challenge the ones for Apple and Samsung because of their shady nature. MI 5 smartphones are cheap and desirable but they may not get a better chance to penetrate and reach the US consumers. They are marketed in US by the US Mobile Xiaomi and Meizu who are not completely turned there as they don’t support US LTE bands, translating to low data connections. The foreign companies have to make adjustments to their devices to make them fit into the spectrums that operate in US (McDaniel et al. 281).
Speculations have revealed that US Mobile only act as middle men in exporting the device. The previous MI 4 went for only $219 which proves that the brand is an underdog compared to the prices of the same devices that were produced by Samsung that same year. The Mi 5 will face a tough competition from the existing iPhone 6s plus and the galaxy s7 edge that was launched at the same time.
Work Cited
Withey .Frank, Lancaster Geoff. CIM Coursebook Marketing Fundamentals 07/08. Abingdon: Routledge, 13 May 2013 - Business & Economics - 416 pages
Yigang Pan. Greater China in the Global Market. Abingdon: Psychology Press, 2000 - Business & Economics - 208 pages
Zimmerman Alan, Blythe Jim. Business to Business Marketing Management: A Global Perspective. Abingdon: Routledge, 12 Apr 2013 - Business & Economics - 528 pages
Kutting .Gabriela. Global Environmental Politics: Concepts, Theories and Case Studies. Abingdon: Routledge, 13 Sep 2010 - Political Science - 208 pages
Charles W. Lamb, Joe F. Hair, Carl McDaniel. Marketing. Boston: Cengage Learning, 1 Jan 2010 - Business & Economics - 804 pages
Taylor .Gabriela. Give Your Marketing a Digital Edge - A 10-Book Bundle Special Edition. Global & Digital, 6 Oct 2013 - Business & Economics
